If you pay close attention to the financial sector investments in the Berkshire Hathaway portfolio, it becomes clear that these holdings all enjoy a common characteristic. Namely, they are all paying out dramatically lower dividends than they are generating in profits and simultaneously engaging in abnormally large share repurchases.
Bank of America is repurchasing $32 billion in stock, JP Morgan is repurchasing $30 billion in stock, Wells Fargo is repurchasing $25 billion, Goldman Sachs is repurchasing $10 billion, Bank of New York is repurchasing $6 billion, and U.S. Bancorp is repurchasing $4 billion.
Normally, this does not come up unless a company is repurchasing many shares quickly (such as the financial firms noted … Read the rest of this article!
One of the ridiculous components of the annual “Forbes 100 List” that outlines the richest people in the world is that it is written with the frame of reference that every member of that list is actively trying to get richer over time. In the case of Carlos Slim, that is undoubtedly true. In the case of Bill Gates, that is undoubtedly false.
When Microsoft went public in 1986, Bill Gates owned 46.7% of the stock. Microsoft is now a company in the $350 billion range. Had Gates decided to let his ownership stake silently compound without any interference from him, he would be sitting on a $163 billion fortune (and that is … Read the rest of this article!
When you study the personal lives of most great value investors, be it Charlie Munger, Warren Buffett, John Neff, Richard Cunniff, Bill Ruane, or Donald Yacktman, you will find that among the many things that they share in common, one of them is this: they have all been internally motivated. When you get your hands on biographies of their lives, you get the impression that even from an early age, they didn’t really care a whole lot what other people thought of them. They weren’t needlessly combative or anti-social, but they weren’t afraid to fade away and do their own thing.
This passage about Warren Buffett, written by Alice Schroeder in Snowball… Read the rest of this article!